Disclaimer The opinions expressed herein are my own personal opinions and do not represent my employer's view in anyway.
There is a great investigative story in the Journal Sentinel about eminent domain abuse right here in Milwaukee. For those who don't want to read the whole thing, here is the reader's digest version:
The city maintains that this is all perfectly well and good, and that the campaign donations given to Alderman Jim Witkowiak had nothing to do with the decision. Uh huh. Let's just put this in very clear terms. This is government sponsored theft, and Alderman Witkowiak is abusing his power as an alderman, and should be driven out of the common council on a rail.
Even if the lot stood empty for 10 more years, it is never legal for a government to take land from one person, simply to sell it to another. The 5th Amendment to the United States Constitution says:
"nor shall private property be taken for public use, without just compensation."
Of course, there was the Kelo case a few years ago... but that was simply a wrong ruling. The Supreme Court essentially declared that the Founding Fathers added the word "public" for fun, and that it had no meaning. It should also be noted that Wisconsin does have a law which specifically forbids the transfer of "non-blighted" land from one private owner to another.
The problem with this is that the barrier to declaring land as "blighted" is low, that it really doesn't exist at all. The fact that the city is using their own failure to grant a permit as a reason to declare land blighted is just gaming the system.